Valued at a market cap of $128.5 billion, Brookfield Asset Management (TSX: BAM) is among the largest companies in Canada. BAM is a private equity firm that specializes in acquisition and growth capital investments.
It invests in capital-intensive sectors such as clean energy and infrastructure. Within the infrastructure sector, it invests across various verticals, including transport, data, utilities, and midstream sectors.
The TSX stock has returned more than 30% in the last 12 months and has doubled in market value since late 2022. Let’s see if BAM stock remains a good buy at this time.
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The bull case of investing in BAM stock
In the second quarter (Q2) of 2025, Brookfield Asset Management delivered impressive Q2 results. The alternative asset manager reported fee-related earnings of US$676 million, an increase of 16% year over year, while distributable earnings rose 12% to US$613 million. Fee-bearing capital stood at US$563 billion, a 10% increase year over year, driven by fundraising and deployment activity.
A strategic focus on digitalization, decarbonization, and deglobalization continues to pay dividends. These megatrends are expected to create capital demands across infrastructure, renewable power, and essential services.
Brookfield’s investments in artificial intelligence infrastructure represent a compelling opportunity, with management estimating a US$7 trillion market for artificial intelligence (AI)-related capital expenditures.
Recent strategic partnerships underscore the value proposition of Brookfield. The US$10 billion framework agreement with Sweden’s government for AI and cloud infrastructure development, combined with renewable energy deals worth over US$3 billion with Google, demonstrates an ability to deliver integrated solutions at scale.
These partnerships leverage Brookfield’s existing capabilities across renewable power, real estate, and infrastructure to create comprehensive offerings that few competitors can match.
Investment activity accelerated in Q2, and the company has already deployed US$85 billion year to date across major infrastructure transactions.
This deployment pace indicates a robust deal environment and Brookfield’s capacity to move decisively on large, complex transactions. Simultaneously, the company generated value through US$55 billion in asset sales and raised US$33 billion in equity proceeds, which highlights the quality of its portfolio management.
Brookfield raised US$22 billion during the quarter, bringing 12-month fundraising to US$97 billion. Notably, three-quarters of quarterly fundraising originated from complementary strategies rather than flagship funds, which highlights the platform’s diversification. The company’s private wealth channel is on track to raise over US$30 billion this year, while the recent acquisition of Just Group in the U.K. adds US$36 billion in potential assets under management.
Credit strategies continue to scale rapidly, with US$250 billion in fee-bearing capital making Brookfield one of the largest private credit platforms globally.
A focus on asset-backed finance, real asset lending, and opportunistic credit, areas where Brookfield maintains competitive advantages, helps the platform avoid commoditized markets while generating attractive risk-adjusted returns.
Management’s five-year plan aims to double the business size, achieving a 16-17% compound annual growth in fee-bearing capital and fee-related earnings.
The combination of scaling flagship funds, expanding complementary strategies, and penetrating individual markets provides multiple growth vectors.
Is BAM stock undervalued?
Analysts tracking the TSX stock forecast revenue to rise from US$4 billion in 2024 to US$6.66 billion in 2027. Compared to this, adjusted earnings are expected to increase from US$1.45 to US$2.21 during this period.
BAM stock is forecast to pay shareholders an annual dividend of US$1.76 per share in 2025, which indicates a yield of 3.3%. These payouts are expected to increase to US$2.20. per share in 2027.
BAM stock trades at 33.8 times forward earnings, above its average multiple of 28 times. If the TSX stock trades at 30 times earnings, it should be priced at US$66, indicating an upside potential of 14% from current levels. If we adjust for dividend reinvestments, cumulative returns could be closer to 19% over the next 18 months.
